Heads nodded in agreement. Some eyes seemed to widen in surprise. But the 40-some people who came to hear Lisa Hughes of United Policyholders talk about homeowners insurance all appeared to have one thing in common: how to obtain and keep an affordable insurance policy on their home.
Sponsored by the Estes Valley Fire Protection District, Hughes was quick to point out that she was not affiliated with any insurance company. Rather, she said, the company that is funded by donations and grants is a nonprofit organization dedicated to assisting homeowners with insurance issues.
“Property claims costs have risen a lot,” she told the group. “But the most claims in Colorado are actually for hail,” she said as she noted that wildfire claims rank second highest in the number of insurance claims made in the Front Range area.
Insurance issues were the primary focal point of Hughes’s talk to the group and included basic information on how to proceed in thinking about home insurance.
While state legislators have been addressing issues surrounding insurance, natural disasters and inflation have created many of the difficulties homeowners now face in obtaining insurance at rates comparable to those seen in the past.
“This is a national crisis,” Hughes said, who lost her own home in the Marshall fire three years ago.
“Competition is low and we’re seeing premiums doubling, tripling, sometimes even more, especially in communities like yours. People are finding their only option is to buy insurance through a company they’ve never heard of, which is called the surplus lines.”
Soon to be operational is the state’s FAIR plan (Fair Access to Insurance Requirements), which is meant to fill the needs of those unable to find insurance from any provider.
“Insurance companies are starting to send up drones to look at your property,” she said in an effort to determine potential risks in insuring a particular property. “The basic result is reduced underwriting and rate increases,” she said.
While turning to the secondary insurance market may be an option for some homeowners, she recommended that everyone should concentrate efforts on reducing their risk profiles.
Some specific suggestions Hughes had for the audience included making sure any policy purchased was a replacement cost coverage, not actual cash value, which provides replacement minus depreciation.
She also recommended that homeowners consider purchasing extended replacement coverage.
“Your risk profile is what the insurance company keeps on you and your property and your cars to see, like you know how much risk you are to them and whether they want to insure you.” A risk score, she explained, is similar to that of a financial credit score.
Improving a risk score is possible by making sure the roof of your home is impact resistant and of a material rated Class 4.
Other mitigation efforts that can make a difference in risk scores can include bringing your home up to Firewise® standards. Consult with Laura Shepherd, wildland risk reduction specialist with EVFPD, for an assessment.
“Make a plan,” Hughes also recommended. Inventory the contents of your home and save the list to the cloud or somewhere it will be safe in case disaster strikes.
Make a Plan
The United Policyholders’ Roadmap to Preparedness is an outreach and education program that helps renters, homeowners, and small business owners take specific steps to protect their assets and build financial safety nets for disaster resiliency.